Proactive Disclosure

The Government is inspired by our past as it invests in our future.
Budget 2008 invests in the highest priorities of Canadians, including
health, opportunity, security and well-being for all citizens, no
matter where they live and work.

Supporting the Vulnerable

With Budget 2008, the Government is committed to helping those who
need the care and support of their fellow Canadians by:

Providing $110 million to the Mental Health Commission of Canada
to support innovative demonstration projects to develop best
practices to help Canadians facing mental health and homelessness
challenges.

Dedicating $282 million over this and the next two years
to expand the Veterans Independence Program to support the survivors
of veterans.

Delivering $3 million for the No Child Without program,
which provides free MedicAlert bracelets to children with
serious medical conditions.

Protecting the Health and Safety of Canadians

Budget 2008 sets aside funds for important initiatives to protect
the health and safety of Canadians.

Supporting Canada’s Food and Consumer Safety Action Plan with
$113 million over two years.

Providing $33 million over two years to ensure greater safety
of natural health products.

Enhancing safety with $9 million over two years to improve
the safety of laboratories dealing with viruses and bacteria.

Providing $25 million over two years to provide Canadians with
better information on the links between environmental contaminants
and illness.

Reducing the availability of contraband tobacco products through
new tax compliance and enforcement measures.

Expanding the list of eligible expenses under the Medical
Expense Tax Credit.

Exempting training to help individuals cope with disabilities
or disorders, such as autism, from the Goods and Services
Tax/Harmonized Sales Tax (GST/HST) and expanding the list of
GST/HST-free medical and assistive devices to include service dogs,
for instance.

Strengthening Partnerships With Aboriginal Canadians

The Government has made significant progress in supporting
Aboriginal Canadians over the past two years with a new practical
approach that is paying off.
Advantage Canada recognized the most effective way to close
the gap in socio-economic conditions faced by Aboriginal Canadians is
to increase their workforce participation. Budget 2008 takes action
toward this goal by:

Dedicating $70 million over two years for measures within
a new Aboriginal economic development framework.

Dedicating $70 million over two years to improve First Nations
education outcomes through enhanced accountability and by
encouraging integration with provincial systems.

Committing $147 million over two years to stabilize current
First Nations and Inuit health programs and promote closer
integration with provincial systems in order to achieve better
health outcomes.

Committing $43 million over two years for prevention-based
models of child and family services on reserve.

Investing over $330 million over two years to improve access
to safe drinking water in First Nations.

A Vision for a New North

Budget 2008 implements the Government’s vision for a new North with
new measures that will protect and secure Canada’s sovereignty and
create more economic opportunities in the North. These include:

Increasing the residency component of the Northern Residents
Deduction by 10 per cent to further assist in drawing skilled labour
to northern and isolated communities.

Providing $34 million over two years for geological mapping
to support economic development.

Extending the Mineral Exploration Tax Credit for an
additional year.

Providing $8 million over two years for a commercial harbour in
Pangnirtung, Nunavut.

Ensuring a Cleaner, Healthier Environment

Budget 2008 includes new measures to strengthen and ensure the
effective implementation of Canada’s ecoACTION plan by:

Providing $66 million over two years to set up the regulatory
framework for industrial air emissions.

Providing $250 million for a full-scale commercial demonstration
of carbon capture and storage in the coal-fired electricity sector,
research on the potential for carbon storage in Nova Scotia and
economic and technological issues.

Extending GST/HST relief to land leased to situate wind- or
solar-power equipment for the production of electricity.

Providing $21 million over two years to make environmental law
enforcement more effective.

Providing $12 million over two years to enhance law enforcement
within Canada’s National Parks.

Investing in Culture and Sports

In 2010, Vancouver and Whistler will host the Olympic and
Paralympic Winter Games. To support these celebrations and help our
summer athletes prepare for future Olympics, Budget 2008 is:

Providing $25 million to help make the 2010 Olympic and
Paralympic Torch Relays a symbol of community and national pride.

Providing $24 million over two years and $24 million per year
ongoing to support the
Road to Excellence for summer Olympic athletes.

In addition, to sustain our cultural institutions, the budget
is allocating:

$9 million over two years to address operating and
infrastructure pressures in Canada’s National Museums.

Tackling Crime and Bolstering Security

The Speech from the Throne identified tackling crime and
strengthening the security of Canadians as a priority. Budget 2008
provides funding to enhance protection for Canadian families and
communities, including:

Setting aside $400 million for a Police Officers Recruitment
Fund to encourage provinces and territories to recruit
2,500 new front-line police officers.

Committing $122 million over two years to ensure that the
federal corrections system is on track to implement a new vision to
achieve better public safety results.

Providing $32 million over two years to enhance the work of
the Public Prosecution Service of Canada.

Providing $30 million per year to the National Crime
Prevention Strategy.

Facilitating compliance by waiving fees for firearms licence
renewal until May 2009.

The Government will continue to show leadership in Budget 2008 by
focusing on priorities outlined in the 2007 Speech from the Throne
that help Canadian families meet their needs.

Budget 2008 invests in measures to support those with mental health
disorders, survivors of veterans, seniors and Aboriginal Canadians. It
modernizes and strengthens the safety system for food, health and
consumer products. It invests in better economic opportunities in the
North. It takes action to ensure a cleaner, healthier environment. It
provides support for celebrating Canadian athletes and sustaining
Canadian National Museums. Budget 2008 also enhances security for
Canadian families and communities.

Supporting the Vulnerable

The Government is committed to supporting those Canadians less able
to help themselves. Budget 2008 builds upon the measures announced in
the last two budgets with additional significant investments to
support a series of demonstration projects led by the Mental Health
Commission of Canada in the area of mental health and homelessness. It
enhances support for the survivors of World War II and Korean War
veterans. It builds on previous investments in the Canadian MedicAlert
Foundation’s No Child Without program, and provides support
to help meet the challenge of elder abuse.

Supporting the Vulnerable

The Government is committed to supporting those Canadians less
able to help themselves. Budget 2008 and recent federal initiatives
to support the vulnerable provide assistance to those Canadians
faced with difficult and unique challenges:

$110 million to the Mental Health Commission to support
demonstration projects focused on mental health and homelessness,
building on the $15 million per year investment to establish the
Mental Health Commission.

$282 million over this and the next two years to extend
support to survivors of war veterans, building on the $30 million
per year provided in Budget 2007 for operational stress injury
clinics, a new Veterans Ombudsman, and enhanced services for
veterans.

$5 million to the Canadian MedicAlert Foundation (including
the $3 million provided in this budget) to provide free MedicAlert
bracelets to children.

$160 million over five years (including the $90 million
extension announced in this budget) for the Targeted Initiative
for Older Workers to assist unemployed older workers in vulnerable
communities.

$550 million per year for the new Working Income Tax Benefit
to help low-income families over the "welfare wall."

More than $3 billion per year in personal income tax relief
for Canadians in the lowest tax bracket (taxable incomes under
$37,885). These individuals pay about 10 per cent of all personal
income taxes, but will receive almost 30 per cent of all personal
income tax relief each year. Almost 700,000 low-income Canadians
will be taken off the tax rolls by 2009, as a result of all
measures.

$1.1 billion in annual benefits from maintaining the GST
credit level while reducing the GST rate from 7 per cent to 5 per
cent.

$360 million per year from increasing the age credit.

$13 million over three years to help seniors and others
recognize the signs and symptoms of elder abuse, building on the
$10 million per year provided in Budget 2007 to expand the New
Horizons for Seniors program.

Over $200 million per year through the Registered Disability
Savings Plan, as it matures, to help parents and others save to
ensure the long-term financial security of a child with a severe
disability.

$45 million per year through increasing the maximum annual
Child Disability Benefit (CDB) and extending eligibility for the
CDB.

$45 million over three years for the Enabling Accessibility
Fund to improve physical accessibility for persons with
disabilities.

$6 million per year to combat sexual exploitation and
trafficking of children.

$1.4 billion through three trust funds in 2006 to provinces
and territories to help address short-term pressures with respect
to affordable housing, including transitional and supportive
housing.

Funding Innovative Projects of the
Mental Health Commission of Canada

The most vulnerable Canadian citizens should be able to live a full
and active life with dignity. Among the most vulnerable people are
those who face complex challenges related to mental health disorders,
and as a result often lack basic necessities such as adequate housing.

Budget 2007 provided funding to establish the Mental Health
Commission of Canada. The Commission acts as a catalyst for the reform
of mental health policies and improvements in service delivery. The
Commission is also a facilitator and supporter of a national approach
to mental health issues and works to diminish the stigma and
discrimination faced by Canadians living with mental illness. The
Honourable Michael Kirby, Chair of the Mental Health Commission of
Canada, has proposed a number of innovative demonstration projects in
selected communities across the country. A project in Vancouver’s
Downtown Eastside would focus on people who are living with a mental
illness and who also have a substance abuse problem.

Other projects in Winnipeg, Toronto, Montréal and Moncton, will
focus on different aspects of the issues related to mental health and
homelessness. These projects will contribute to our knowledge base and
to the development of best practices.

Budget 2008 provides the Commission with $110 million to support
the proposed demonstration projects.

Veterans: Enhancing Support for Survivors

The Government recognizes Canada’s obligation to ensure that the
men and women who fought for our freedom have the programs and
services they need. Budget 2007 provided for five new Operational
Stress Injury Clinics to be located across the country to assist
Canadian Forces members and veterans dealing with stress injuries
related to their military service, as well as additional funding for
family support services. In that budget, the Government demonstrated
its ongoing commitment to veterans and their families by appointing a
Veterans Ombudsman, who is responsible to ensure that the services
delivered by the Department of Veterans Affairs meet the standards of
service set out in the Veterans Bill of Rights. Budget 2007 also
provided additional ongoing funding to enhance services to veterans as
well as to respond to any issues identified by the new Ombudsman.

Today, many of our World War II and Korean War veterans have passed
away. They are survived by their families, some of which require our
support and help. To recognize the important role and the sacrifices
made by these survivors, Budget 2008 provides $282 million over this
and the next two years to ensure that survivors in need receive the
help they require to remain independent in their own homes. The
Veterans Independence Program will provide a housekeeping and grounds
maintenance benefit of up to $2,400 per year to survivors of war
veterans who would have qualified for the Veterans Independence
Program, where the survivor needs the services to remain independent
in their own home and is either in financial need or is eligible for
the Disability Tax Credit.

Canadian MedicAlert Foundation: Accelerating the No Child Without
Program

The Canadian MedicAlert Foundation is the leading provider of
emergency medical information services linked to customized bracelets
for Canadians with medical conditions and special medical needs. In
November 2006, the Foundation announced a new No Child Without
program, which provides MedicAlert bracelets without charge to
children who suffer from serious medical conditions such as peanut
allergies, childhood diabetes or asthma.

To accelerate the Foundation’s goal of implementing the No
Child Without program in all elementary schools in Canada, Budget
2008 provides a one-time payment of $3 million, building on previous
investments.

Protecting Seniors From Abuse

Budget 2007 increased resources for the New Horizons for Seniors
program from $25 million to $35 million per year to address, among
other things, the safety and security of seniors, working with
seniors’ organizations to identify the best ways to promote awareness
and reduce the incidence of elder abuse. Budget 2008 is investing an
additional $13 million over three years to help seniors and others
recognize the signs and symptoms of elder abuse and to provide
information on what support is available.

Protecting the Health and Safety of Canadians

Budget 2008 builds on the 2007 Speech from the Throne commitment to
introduce measures on food and product safety to ensure that families
have confidence in the quality and safety of what they buy. The
measures will modernize and strengthen Canada’s safety system for
food, consumer products and health products, increase access to safe
natural health products, enhance the safety of Canada’s laboratories,
and inform Canadians about the health risks associated with
environmental contaminants.

Modernizing and Strengthening Canada’s Safety System for Food,
Consumer and Health Products

Canadians have been concerned about several recent high-profile
safety issues concerning food and consumer products. On December 17,
2007, the Prime Minister announced Canada’s Food and Consumer Safety
Action Plan. The Action Plan will modernize and strengthen Canada’s
safety system for food, consumer products and health products. Budget
2008 provides funding of $113 million over the next two years for the
Action Plan.

The challenge of ensuring access to safe, effective and
high-quality natural health products is a shared responsibility of
industry, consumers and government. Budget 2008 provides funding of
$33 million over the next two years to implement a new approach to the
regulation of natural health products and ensure the safety of
Canadians.

Enhancing the Safety of Our Laboratories

To undertake important research, many laboratories in Canada work
with viruses and bacteria. Currently, there are inconsistent
regulatory frameworks for these laboratories. Budget 2008 provides
funding of $9 million over the next two years to enhance safety
through a new regulatory framework that will cover all Canadian
laboratories and ensure the same standards. Enhanced inspections will
be undertaken to monitor compliance with the new framework.

Understanding the Impact of the Environment on Our Health

Budget 2008 provides funding of $25 million over the next two years
to help Canadians make environmentally healthy decisions. An
Environmental Health Guide, modelled after Eating Well with
Canada’s Food Guide, will be launched to describe the actions
that Canadians should take to protect themselves and their families.
Also, the Canadian Health Measures Survey will be expanded. The focus
will be on the relationship between environmental contaminants and
congenital anomalies and childhood developmental disorders, and on
examining the links between environmental contaminants and the risk of
illness.

Tobacco Taxation

The Government is committed to improving the health of Canadians by
taking action to discourage tobacco consumption. The Government’s
comprehensive national strategy includes prevention, product
regulation and cessation programs, and aims to reduce the prevalence
of smoking from 19 per cent of Canadians to 12 per cent by 2011.

A key part of the Government’s plan to discourage smoking is to
reduce the availability of contraband tobacco products. Budget 2008
announces actions to achieve this objective by:

Limiting the possession and importation of tobacco manufacturing
equipment to persons holding a tobacco manufacturer’s licence to
make it more difficult to obtain the equipment necessary to produce
cigarettes.

Making explicit the Minister of National Revenue’s authority to
deny a tobacco manufacturer’s licence where access to the premises
of a licensee is impeded.

Changing the way manufactured tobacco is taxed to discourage the
multiplicity of package sizes, thereby facilitating the
implementation of the Canada Revenue Agency’s new stamping and
marking regime.

Budget 2008 also proposes other changes to the excise duties on
certain tobacco products to support the health goal of reducing
smoking. Details on the measures related to excise duties on tobacco
products that are proposed in Budget 2008 are provided in Annex 4.

These measures are expected to increase federal tax revenues by
$5 million in each of 2008–09 and 2009–10.

Other Health-Related Tax Measures

Budget 2008 proposes a number of changes to the tax treatment of
health-related goods and services in order to reflect the evolving
nature of the health sector and the health care needs of Canadians,
including:

Expanding and clarifying the list of expenses an individual may
claim for income tax purposes under the Medical Expense Tax Credit
(METC).

Exempting from the Goods and Services Tax/Harmonized Sales Tax
(GST/HST) specially designed training to assist individuals in
coping with the effect of a disorder or disability, such as autism.

Expanding the list of GST/HST-free medical and assistive devices
to include, for instance, service dogs.

The changes to the METC are expected to reduce federal tax revenues
by $5 million per year in 2008–09 and 2009–10. The changes to the
GST/HST health-related measures are expected to reduce federal tax
revenues by $15 million per year in 2008–09 and 2009–10. More details
on these and other health-related tax measures proposed in Budget 2008
are provided in Annex 4.

Strengthening Partnerships With Aboriginal Canadians

The Government has made significant progress on Aboriginal issues
over the past two years, working with willing partners to achieve
tangible results. This new, practical approach of working with
Aboriginal governments and organizations, provinces and territories,
and the private sector to address clear priorities in an effective and
targeted manner is paying off and producing results. Budget 2008 takes
important action to build upon this approach, largely funded from the
money committed to Aboriginal priorities in Budget 2006.

Establishing a New Framework for Economic Development

Advantage Canada recognized that the most effective way to
address the gap in socio-economic conditions faced by Aboriginal
Canadians remains increasing their participation in the Canadian
economy.

There are extraordinary economic opportunities across the country.
In particular, the mining and resource sectors could provide new and
historic possibilities for many Aboriginal Canadians to move out of
poverty and dependency to become full participants in the labour force
and the economy. The Government is committed to fostering partnerships
involving the private and public sectors that help Aboriginal people
get the skills and training they need to take advantage of the
opportunities in the North and across Canada.

Budget 2008 takes another important step to help Aboriginal people
make the most of these opportunities by committing to establish a new
framework for Aboriginal economic development by the end of 2008.

The Government will work with Aboriginal groups and other
stakeholders to develop a framework that will be partnership-based and
opportunity-driven and that will ensure that federal investments help
Aboriginal Canadians benefit from viable economic opportunities.
Budget 2008 dedicates $70 million over the next two years for
Aboriginal economic development measures to support the new framework.

Concurrently, the Government will continue to engage Aboriginal
groups and other stakeholders on a successor approach to the
Aboriginal Human Resources Development Strategy, expected in 2009. The
new approach will better place the skills and training available for
individuals in the context of employer and labour market demands.

Enhancing Education Outcomes

Better education outcomes are crucial for First Nations students,
their families and their communities. Progress on outcomes depends on
increased accountability throughout First Nations school systems and
better integration with provincial education systems.

The Government will work with provincial governments, First Nations
organizations and educators to develop new and more effective tools
and approaches to First Nations education.

Budget 2008 dedicates $70 million over the next two years to
support tripartite agreements with willing First Nations and
provinces, that will set joint goals, share expertise and establish
accountability benchmarks to ultimately enhance education outcomes for
First Nations students. The focus will be on improving financial and
performance management systems and implementing community-based school
success plans. The Government will also continue to review its First
Nations and Inuit post-secondary education programs to ensure they are
coordinated with other programs and that they provide the support that
First Nations and Inuit students need to stay in school and complete
their education.

Strengthening First Nations and Inuit Health Programs

Over the last two years, provinces and First Nations groups have
indicated a willingness to discuss integration of the First Nations
and Inuit health programs with provincial health systems to allow more
effective and efficient delivery, recognizing the comparative
advantage of each level of government.

Budget 2008 provides funds to lay the groundwork for a transition
to this new approach. It will build on recent success in British
Columbia by continuing to pursue innovative partnerships with willing
provinces and First Nations groups leading to integration agreements.

Budget 2008 commits $147 million over the next two years to
stabilize current programs and put in place concrete improvements
aimed at better health outcomes for First Nations and Inuit. Funds
will support improvements in health care delivery through greater
integration with provincial and territorial health systems.

Expanding First Nations Child and Family Services

In April 2007, the Government announced a partnership with the
Province of Alberta and Alberta’s First Nations to shift on-reserve
child and family services in Alberta to a prevention-based approach.
This approach has had success in providing families with better access
to early intervention, family engagement and referrals to community
resources to help them before a crisis occurs.

Budget 2008 commits $43 million over the next two years to fund
similar agreements in other provinces.

Building on Success: First Nations Water
and Wastewater Action Plan

The Government’s Plan of Action for Drinking Water in First Nations
Communities has significantly decreased the number of First Nations
communities with high-risk communal water systems. More communities
now have oversight of water systems by certified operators in place.

To continue this progress and improve access to safe drinking water
in First Nations, Budget 2008 invests over $330 million over the next
two years to extend the Plan of Action. The Government will undertake
consultations with First Nations and provincial and territorial
governments on the development of a regulatory regime to oversee water
quality on reserve.

A Vision for a New North

A vast region of awe-inspiring beauty and abundant resources, the
North is at the very heart of Canada’s identity.

The Government’s comprehensive northern strategy implements its
vision of a new North that realizes its full social and economic
potential and secures its future, for the benefit of all Canadians.
The strategy is focused on strengthening Canada’s sovereignty,
promoting economic and social development, protecting our
environmental heritage, and improving and devolving governance, so
that northerners have greater control over their destinies.

Canada’s Vision for the North

The Government of Canada is committed to helping the North
realize its true potential as a healthy and prosperous region within
a strong and sovereign country.

The Government envisions a new North where:

Self-reliant individuals live in healthy, vital communities,
manage their own affairs and shape their own destinies.

The northern tradition of respect for the land and the
environment is paramount—where principles of responsible and
sustainable development anchor all decision making and action.

Strong, responsible, accountable governments work together for
a vibrant, prosperous future for all—where people and governments
are significant contributing partners to a dynamic, secure
Canadian federation.

Since 2006, the Government has made important investments to
support the objectives of the northern strategy:

$62 million over this and the next four years to advance the
health of the oceans and support greater water pollution
prevention, and to improve surveillance and enforcement along
Canada’s coasts, including in the Arctic; and

$15 million over this and the next two years to create and
expand protected areas in the Northwest Territories.

Advancing social and economic development in the territories
through a $300-million Northern Housing Trust and an increase
of $195 million between 2006–07 and 2008–09 in Territorial
Formula Financing payments.

Budget 2008 implements the Government’s vision for a new North by
proposing measures that will protect and secure Canada’s sovereignty
and create more economic opportunities.

Increasing the Northern Residents Deduction

To further assist in drawing skilled labour to northern and
isolated communities, Budget 2008 proposes to increase the maximum
daily residency deduction from $15 to $16.50. This increase will bring
the maximum annual amount of the residency deduction to $6,022.50
($16.50 multiplied by 365 days) from $5,475 ($15 multiplied by 365
days) for residents of the Northern Zone and to $3,011.25 from
$2,737.50 for residents of the Intermediate Zone.

This measure will be effective as of January 1, 2008. It is
estimated that this change will reduce federal revenues by a small
amount in 2007–08, and by $10 million in each of 2008–09 and 2009–10.

Improving Geological Mapping for Resource Development

The development of energy and mineral resources is the primary
source of economic growth in Canada’s North. Exploration for new
mineral resources is an inherently risky but potentially rewarding
economic activity, leading to new job opportunities and contributing
to the viability of many resource-dependent communities. Publicly
available geoscience maps help companies target new exploration
activity to the areas of highest mineral potential. Budget 2008
provides $34 million over the next two years to Natural Resources
Canada for geological mapping, primarily focused in Canada’s North,
and for logistical support for mapping activities provided by the
Polar Continental Shelf Project. Resources allocated for geological
mapping in southern Canada will be cost-shared with the provinces.

Extending the Mineral Exploration Tax Credit

The temporary 15-per-cent Mineral Exploration Tax Credit is an
incentive available to individuals who invest in flow-through shares
that are used to finance mining exploration. Budget 2008 proposes to
extend the credit, which is intended to assist companies to raise
capital for exploration, for an additional year, until March 31, 2009.
Extension of the credit will support continued exploration for new
mineral reserves in the North and other regions of Canada. The net
fiscal cost of this extension is estimated at $120 million over the
next two fiscal years.

Supporting Fisheries in the North

Over the last 10 years, Nunavut’s offshore fishery for shrimp and
turbot has grown into a harvest of over $50 million annually. More
untapped inshore fishing opportunities could be pursued; however, the
Nunavummiut need infrastructure and supporting services to take
advantage of these opportunities. In Budget 2008, the Government is
proposing that a commercial harbour be built in Pangnirtung, Nunavut.
This initiative will be supported by fishery science and resource
management to assess and manage the adjacent fish stocks, as well as
by additional Canadian Coast Guard navigational aids to ensure the
safety of fishermen and fisherwomen. This initiative will augment the
current limited capacity for the marine shipment of goods during
open-water season and increase the safety of vessels offloading their
catch. It will also enable the community to further develop its
economic potential, encourage the development of tourism in the region
and create local employment. Budget 2008 provides $8 million over the
next two years for the construction, operational and management costs
associated with this initiative.

Protecting and Securing Canada’s Sovereignty

The Canadian Coast Guard’s most capable Arctic icebreaker, the CCGS
Louis S. St-Laurent, is scheduled to be decommissioned in 2017. As
such, the Government will replace this vessel with a new polar class
icebreaker that has greater icebreaking capabilities. Budget 2008
provides $720 million for the procurement of this vessel.

Canada must complete comprehensive mapping of its seabed in both
the Arctic and Atlantic Oceans to support the submission to the
United Nations Commission on the Limits of the Continental Shelf by
the end of 2013. Budget 2008 provides $20 million over the next two
years to carry out data collection activities and legal work to enable
Canada to present an effective submission to the Commission.

Ensuring a Cleaner, Healthier Environment

The Government’s comprehensive ecoACTION plan is making progress
on preserving and enhancing the environment, improving air and water
quality, reducing greenhouse gas emissions and addressing the health
effects of environmental contaminants.

A key element of the plan is the regulatory framework for
industrial air emissions, which will impose binding national
regulations on greenhouse gas emissions and air pollutants across all
major industrial sectors. The ecoACTION plan also includes a mandatory
fuel-efficiency standard for new cars and light trucks for the 2011
model year and standards and regulations for other forms of
transportation, renewable fuels, and the energy efficiency of consumer
and commercial products.

Budget 2008 includes new measures to strengthen and ensure
effective implementation of Canada’s ecoACTION plan. It provides
funding to implement regulations that will lead to significant
reductions in greenhouse gas emissions and improvements in air
quality, and proposes additional incentives that will advance progress
on cleaner energy generation and use. It will also improve Canada’s
capacity to enforce environmental laws and support conservation.

Curbing Greenhouse Gas Emissions

Canada’s regulatory framework for industrial air emissions will
require reductions in greenhouse gas emissions and air pollutants from
Canadian industry. The greenhouse gas regulations, which enter into
force in 2010, provide for market-based mechanisms that will help
establish a price for carbon and support the development of carbon
trading in Canada, which in turn will drive private sector investments
in clean technology needed to reduce emissions.

Budget 2008 provides $66 million over two years to set up key
features of the regulatory regime, including an electronic tracking
system for units traded in the carbon market, a single-window
reporting system for industry, an industry-supported technology fund
to invest in emission reduction projects, an offset system to finance
emission reduction projects in non-regulated sectors, and better
modelling of air quality.

Carbon Capture and Storage

Carbon capture and storage presents an opportunity for Canada to
develop world-leading technology than can significantly reduce
greenhouse gas emissions. It is a process consisting of capturing
carbon dioxide (CO2) from certain large industrial and
power generation facilities and placing it in long-term storage.
Coal-fired power plants can reduce air pollutants and produce a CO2
emissions stream that is more readily captured by introducing clean
coal technologies. Reducing the carbon emitted from these facilities
will make a significant contribution to achieving Canada’s greenhouse
gas emission reduction objectives.

Saskatchewan has been a leader in the development of carbon capture
and storage technology, and has proposed to put in place a full-scale
commercial demonstration of carbon capture and storage in the
coal-fired electricity sector. Budget 2008 provides $240 million in
trust in 2007–08 to Saskatchewan for this initiative, which will be
matched by the province and used to partner with industry. The results
of the demonstration will be made available to the Government of
Canada, other provinces and industry to diffuse this important
technology. Funding will be paid into a third-party trust, once
legislation has been passed.

Although the Western Sedimentary Basin has geological formations
that have been extensively studied and are ideal for the storage of CO2,
less is known about storage in other geological formations. Budget
2008 is providing $5 million in 2007–08 which, along with
complementary investment by the province of Nova Scotia, will support
geological research examining the potential for carbon storage
in the province.

The report of the Canada-Alberta ecoENERGY Carbon Capture and
Storage Task Force was released on January 31, 2008, and identified
a number of regulatory, economic, and technological issues that need
to be resolved to accelerate deployment of carbon capture and storage
technologies. Budget 2008 provides $5 million in 2007–08 to the
Institute for Sustainable Energy, Environment and Economy at the
University of Calgary to work with a broad range of stakeholders
on these outstanding issues.

CO2 Pipelines—CCA Rate

Capital cost allowance (CCA) rates are generally set so that the
cost of a capital asset is deducted for tax purposes gradually over
its useful life to ensure neutral treatment across business assets. As
part of the Government’s ongoing review of CCA rates, Budget 2008
proposes the following modifications to better reflect the useful life
of CO2 pipelines, which are expected to be the primary
means of transporting CO2 from industrial facilities to
geological storage locations:

The CCA rate for CO2 pipelines will be increased to
8 per cent from 4 per cent; and

The CCA rate for pumping and compression equipment on CO2
pipelines will be set at 15 per cent.

This measure is not expected to have a significant fiscal cost over
the next two fiscal years.

Recent Federal Initiatives in Support of the Government’s
Renewable Fuels Strategy

Since 2007, the Government has announced a number of other
significant measures in support of renewable fuels. These measures
include:

$1.5 billion for the ecoENERGY for Biofuels program to provide
operating assistance to renewable fuel producing facilities.

$500 million for the NextGen Biofuels Fund to encourage the
construction of several new first-of-kind, large-scale
demonstration facilities for renewable alternatives to gasoline
and diesel. It is managed by Sustainable Development Technology
Canada.

$200 million for the ecoAgriculture Biofuels Capital
Initiative to assist agricultural producers to construct or expand
biofuel production facilities.

$20 million for the Biofuels Opportunities for Producers
Initiative to assist farmers in developing business proposals and
feasibility studies for biofuel facilities.

Accelerating Access to Renewable Fuels

Renewable fuels, such as ethanol and biodiesel, are cleaner fuels
that reduce air pollution and lower greenhouse gas emissions. In
December 2006, the Minister of Natural Resources announced a
regulation requiring a 5 per cent average renewable content in
Canadian gasoline by 2010, and the intent to develop a regulation for
diesel fuel and heating oil to contain 2 per cent average renewable
fuel content by 2012.

Budget 2008 provides $10 million over two years for scientific
research and analysis on biofuels emissions to support the development
of regulations, and demonstration projects to verify that new blended
renewable diesel is safe and effective for the Canadian climate and
conditions.

E85 fuel is a renewable fuel containing 85 per cent ethanol and
15 per cent gasoline. Flex-fuel vehicles burning E85 fuel instead of
regular gasoline emit about 40 per cent less carbon dioxide over any
given distance. To improve access to E85 fuels, Budget 2008 provides
up to $3 million over two years to Natural Resources Canada for a
pilot program to demonstrate E85 fuelling infrastructure and promote
the commercialization of E85 fuels.

Decreasing Emissions from Passenger Vehicles

Budget 2007 announced funding for a two-year ecoAUTO Rebate
program for consumers who purchase fuel-efficient vehicles. The
program offers rebates from $1,000 to $2,000 to people who, beginning
March 20, 2007, buy or enter a long-term lease (12 months or more) for
a fuel-efficient vehicle.

The Government has taken other actions that reduce emissions from
passenger vehicles. Budget 2007 provided $63 million over this and
the next two years to help get older polluting vehicles off the road.
Budget 2008 will accelerate consumer access to cleaner E85 fuel with
a new demonstration program.

In addition, the Government is introducing a new $250-million
program, highlighted in Chapter 3, to support research and development
projects in the automotive sector for greener and more fuel-efficient
vehicles.

Investing in Nuclear Energy

Interest in nuclear energy is increasing as a result of growing
demand for energy worldwide, rising fossil fuel prices and concerns
about climate change. Canada has played a leading role in nuclear
science and technology for over 50 years through Atomic Energy of
Canada Limited (AECL). AECL specializes in a range of advanced
nuclear-energy products and services that are an important component
of clean-air energy programs on four continents.

Budget 2008 provides an additional $300 million to AECL in 2008–09
for its operations, including the development of its next generation
nuclear power reactor, the Advanced CANDU Reactor, and to maintain the
safe, reliable operations of the Chalk River Laboratories. Combined
with a renewed management team that ensures strong leadership, these
investments will help position AECL for success in the growing
market for clean energy.

Clean Energy Generation

Accelerated CCA

Accelerated CCA for clean energy generation equipment is provided
through CCA Class 43.2 at a rate of 50 per cent per year. The class
covers a variety of stationary equipment that generates electricity or
heat by using renewable or waste sources, or by using fossil fuel
efficiently.

Budget 2008 proposes to expand eligibility for accelerated CCA
under Class 43.2 to several additional applications:

Ground source heat pump systems used for space heating and hot
water.

Biogas production systems that use animal waste and sewage
treatment residue as inputs and those that produce biogas for
commercial sale.

Electrical or thermal generating systems that use purchased
biogas.

Systems that produce bio-oil, or heat from specified waste
sources, where the system output is sold to a third party that uses
it for specified purposes.

These enhancements will promote investment in technologies that
help reduce emissions of greenhouse gases and air pollutants and
increase the diversity of Canada’s energy supply by converting waste
materials into energy.

These measures are expected to reduce federal revenues by
approximately $5 million over the next two fiscal years.

Property Leases for Wind and Solar Power Equipment

Budget 2008 proposes to expand GST/HST relief currently available
in respect of land leased to explore for or exploit mineral, peat,
forestry, water or fishery resources to include land leased to situate
wind or solar power equipment for the production of electricity,
applicable to lease payments due on or after February 26, 2008. This
proposed change will result in consistent tax treatment of leases for
wind and solar power and those for other natural resources.

Further details on the tax measures in Budget 2008 are set out in
Annex 4.

Effective Environmental Law Enforcement

Environmental laws alone are not enough to guarantee a cleaner,
better environment. These laws also need to be enforced. In Budget
2007, resources were provided to hire more than 100 new officers to
bolster enforcement capacity. Budget 2008 provides $21 million over
two years to Environment Canada to increase the effectiveness of
enforcement officers with better forensic laboratory support, data
collection, analysis and management systems.

Budget 2008 also provides up to $12 million over two years to Parks
Canada for the implementation of an enhanced law enforcement program
within Canada’s National Parks.

Promoting Conservation and Sustainable Economic Development

The United Nations Educational, Scientific and Cultural
Organization has recognized 13 regions in Canada that demonstrate a
balanced approach to conservation and economic development. These
biosphere reserves are geographical regions in which community-based
initiatives protect the natural environment, while ensuring the
continued growth of the local economy in an ecologically sustainable
way. The Canadian Biosphere Reserves Association is a not-for-profit
organization that provides networking and expert support to
communities in the designated biosphere reserves. Budget 2008 provides
$2 million over two years to Environment Canada to support the
operations of the Canadian Biosphere Reserves Association.

Investing in Culture and Sports

While many of our athletes compete in various sporting events
around the world, the Olympic and Paralympic Games are a special
competition which represent the pinnacle of accomplishment. In 2010,
Vancouver and Whistler will be hosting the Olympic and Paralympic
Winter Games. As part of the preparations for these Games, Budget 2008
provides funding for the community torch relay celebration program. In
the lead-up to the Beijing Olympics this year, and building on current
federal investments of over $140 million per year for amateur sports,
Budget 2008 provides additional support for our summer athletes to
help them prepare for these and future Olympics.

Building National Pride: 2010 Olympic and Paralympic Torch Relays

The Government has already made significant investments in the 2010
Olympics and Paralympics. It is a time for celebration. The 2010
Olympic Torch Relay will pass through over 350 communities from
November 2009 to February 2010, reaching over 80 per cent of the
Canadian population. The relay route will be announced in the fall of
2008, and it is expected that there will be up to 12,000 torch bearers
and escorts. Canada’s 2010 Olympic and Paralympic Torch Relays will
provide an opportunity to connect and inspire all Canadians.

Budget 2008 provides $25 million to make the Torch Relays the
centrepiece of the Government’s outreach to communities across the
country, building community and national pride as part of the Olympic
and Paralympic Games.

Supporting Our Athletes: Summer Sport Excellence

Canada’s Olympians and Paralympians are dedicated to the pursuit
of excellence, and their accomplishments on the world stage make
all Canadians proud.

The Government of Canada is the single largest investor in Canada’s
sport system. Through Sport Canada, it helps our athletes by providing
funding for such things as coaching and equipment. Following the award
of the 2010 Olympic and Paralympic Winter Games to Vancouver, the
Government announced significant financial support for our Winter
Olympians and Paralympians.

The Government is also committed to ensuring that our summer
athletes have the support they need to perform at the top levels of
international competition. Budget 2008 provides funding of $24 million
over the next two years and $24 million per year ongoing to support
the Road to Excellence . This funding will enhance the
Government’s excellence programming for summer athletes, increasing
the number of coaches, training camps and opportunities for our
athletes to compete internationally.

Renewing Our National Museums

The Government is committed to making investments in the renewal of
its four National Museums (the National Gallery of Canada, the
Canadian Museum of Civilization, the Canada Science and Technology
Musuem and the Canadian Museum of Nature) to address operating and
infrastructure pressures. The Government is reinvesting $9 million
over two years from strategic review savings to address these
pressures. These investments will assist in strengthening Canada’s
cultural institutions and protecting its cultural heritage for future
generations.

Promoting Official Languages

The Government’s five-year Action Plan for Official Languages was
launched in 2003. A cross-country consultation process, led by
Mr. Bernard Lord, has recently been concluded on the future of
official languages programming in Canada. Over the next year, the
Government will build on previous investments through the development
of a new Action Plan on Official Languages that will respond to
Canada’s evolving demographic reality, to promote and protect
linguistic duality across the country.

Tackling Crime and Bolstering Security

The Speech from the Throne identified tackling crime and bolstering
the security of Canadians as a priority. Budget 2008 provides funding
to protect Canadian families and communities, building on the
important investments this government has made in previous budgets.

Creating a Police Officers Recruitment Fund

A paramount responsibility of government is to protect the right to
safety and security. A Safer Communities strategy will be implemented,
in part through effective law enforcement. The Government takes this
responsibility seriously to help ensure every Canadian is safe and
secure.

Budget 2008 provides funding to provinces and territories to
support them in recruiting 2,500 new front-line police officers. It
sets aside up to $400 million in 2007–08 to be paid into a third-party
trust for provinces and territories, allocated proportionately, to
meet this objective.

Funding will be paid into the trust, once legislation has been
passed, for those provinces and territories that have publicly
committed by March 31, 2008 to participate in a national effort to
hire an additional 2,500 police officers across the country and thus
make communities safer. Provinces and territories will have the
flexibility to draw down the funding as they require over the next
five years. Provincial and territorial governments are encouraged to
report directly to their residents on the expenditures financed and
outcomes achieved with the funding provided through the Police
Officers Recruitment Fund.

A New Vision for Correctional Service of Canada

Over the past decade, the federal corrections system has been
facing tough new challenges. In April 2007, the Government established
an independent panel chaired by Mr. Rob Sampson to review the federal
corrections system. The panel’s report, which was published in
December 2007, sets out a vision for transforming the federal
corrections system based on an increased emphasis on offender
responsibility and accountability; the elimination of drugs from
prisons; the provision of more employment and employability skills for
offenders; and the modernization of physical infrastructure based on
more efficient and effective design, construction and operations.
This vision requires a fundamental transformation of federal
corrections to achieve better public safety results. It will require a
long-term commitment and a phased approach.

Building on the significant funding provided in Budget 2007,
Budget 2008 invests in this new vision by addressing some of the
panel’s key recommendations and by setting the foundation for changes
to the federal corrections system. Budget 2008 stabilizes funding for
Correctional Service of Canada while detailed planning for the
transformation is undertaken. In addition, Budget 2008 provides
funding for the first critical stage of transformation to allow
Correctional Service of Canada to increase control of its institutions
through enhanced safety and security, by dealing more effectively with
the growing number of offenders with gang affiliations, and by
detecting and eliminating drugs in penitentiaries. These investments
will provide correctional staff with the tools and training they need
to do their jobs safely and more effectively.

Budget 2008 commits $122 million over the next two years to ensure
that the federal correctional system is firmly on track to respond
comprehensively to the recommendations of the independent panel led by
Mr. Sampson.

Strengthening the Public Prosecution Service of Canada

Getting tough on crime does not end with greater investments in
enforcement. The whole criminal justice system must work together to
ensure those who are charged with offences are brought to trial in a
timely fashion. The Public Prosecution Service of Canada is
responsible for prosecuting offences under more than 50 federal
statutes and for providing prosecution-related legal advice to law
enforcement agencies.

To support the ongoing work of the Public Prosecution Service of
Canada, Budget 2008 provides $32 million over the next two years to
prosecute drug cases more effectively and to provide greater support
for Crown agents across Canada.

Funding a Strong National Crime Prevention Program

Budget 2008 provides $60 million over the next two years, for the
National Crime Prevention Strategy, in addition to the existing annual
investment of $33 million. National Crime Prevention Strategy efforts
are focused on priorities established in partnership with
community-based not-for-profit organizations. Priorities for funding
include providing support for vulnerable families and children at
risk, preventing youth gang and drug-related crime, and preventing
recidivism among high-risk groups.

Firearms Action Plan

As part of the strategy on tackling crime, the Government is
committed to effective gun control and action against those who use
firearms for criminal purposes. Effective gun control requires the
licensing of all individuals who legally possess guns. The Government
will bring forward a short-term action plan which will include
measures to facilitate compliance and the extension of the waiver on
firearms renewal fees until May 2009.

Table 4.1
Leadership at Home
(millions of dollars)

2007–08

2008–09

2009–10

Total

Supporting the Vulnerable

Mental Health Commission of Canada
innovative projects

110

110

Veterans: enhancing support for survivors

259

12

11

282

Canadian MedicAlert Foundation

3

3

Protecting seniors from abuse

5

6

10

Subtotal—Supporting the Vulnerable

369

20

17

406

Protecting the Health and Safety
of Canadians

Modernizing and strengthening Canada’s
safety system for food, consumer
and health products